One of the biggest stressors that administrators face is having a thorough knowledge of compliance rules and regulations, all while trying to stay up to date and current with new bills & laws that get passed regularly. One of the biggest compliance topics – FLSA Overtime! Failing to comply with the FLSA Overtime laws is one of the ways your business could end up in an audit or lawsuit! So, what exactly is FLSA overtime?
The Fair Labor Standards Act (FLSA) of 1938 is the primary U.S. federal law that protects the rights of workers. Since the law was enacted more then 80 years ago, Congress has revised the law to include protections for minimum wage, overtime pay, recordkeeping, child labor and various other labor regulations. For this blog, we will be specifically talking about the provisions relating to FLSA overtime.
FLSA Overtime, as defined by the U.S. Department of Labor, “covered nonexempt employees must receive overtime pay for hours worked over 40 per workweek (any fixed and regularly recurring period of 168 hours – seven consecutive 24-hour periods) at a rate not less than one and one-half times the regular rate of pay.”
Critical Terms for Overtime Calculations:
- Workday – any consecutive 24-hour period starting at the same time each calendar day (ex 12:01 am – midnight; company will designate the 24-hour period). Different groups of employees can have different designated workdays (Ex. Night shift).
- Workweek – any 7 consecutive 24-hour periods starting on the same calendar day each week (ex Sunday – Saturday; company will designate the week start/end). Different groups of employees can have different designated workweeks
- Seventh consecutive day – the seventh consecutive day is the last day of the defined 7 day workweek. The seventh consecutive day gets paid at time and one-half the regular pay rate for the first eight hours worked and double the regular rate for all hours worked beyond the eight.
- Regular rate of pay – the employees rate of pay (not always the regular hourly rate) which must include almost all forms of pay the employee receives (hourly earnings, commissions, nondiscretionary bonuses, etc). DOL: Fact Sheet #56A
For help calculating FLSA Overtime or Weighted Average Overtime for someone working multiple different rates/jobs, please review the links below.
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DOL – Fact Sheet #23 Overtime Pay Req
Disclaimer: These materials are provided for informational purposes only and are not intended as legal or tax advice. Readers of the Innovative Blog should contact their legal or tax professionals to discuss how these matters relate to their individual circumstances.